January 11, 2016

Orchestrating the balance between digital and traditional business

Ujjal Choudhury

Director, Corporate Development, Tieto

In this  post, Ujjal Choudhury answers an important question: how do you actually create this balance between the digital and the traditional business? In other words, how do you orchestrate your business into a dual state? 

In the first post  in this series of blog posts, we learned that the key to digitalizing your business successfully lies in dualism—the harmonious coexistence of your traditional and digital business. In this  post, I go further into the topic.

When you encounter the word ‘orchestrate’, you naturally think of music. Orchestrating literally means to compose or arrange music for an orchestra, so that an orchestra can play it. When the violinist is performing a delicate solo, a saxophonist should not interrupt and take all the attention; proper orchestration prevents such chaos. 

Orchestrating your business accomplishes essentially the same goal by focusing your resources. This allows you to freely create those digital and disruptive innovations, without your focus being cannibalized by elements that do not provide a competitive edge. Here, when I say resources, I refer to both investments of money as well as time.

Your digital business is where most of the new experimentations will happen; this is the place where you should wisely spend time, money and energy. This should be your focus and where you should place your smartest employees. However, creating digital innovations requires experimentation, and experimentation may mean trying and trying again.

But how do you keep focus on digitalizing and disruptions when you still have a traditional business to run? What do you manage your traditional business? This is where proper orchestration is vital.

In my opinion, orchestrating your traditional business should be broken down into two main elements:

  1. Identify the key elements in your business that need to be optimized. These are the places that you want to make as operationally efficient as possible. Here you should focus your time, attention and money to create technological advances in order to optimize your business. In other words, you must determine ways to use technology to reduce operating costs - for example by utilizing technologies such as automation or robotics.
  2. Identify your commodities the processes, technologies and systems that you still need but do not give you a competitive advantage. These are the elements in your traditional business on which you should not spend additional resources. For example, many IT processes are a commodity and should be treated as such. Accordingly, it is important to identify those elements that don’t yield a competitive advantage and determine ways to optimize them.

To better understand this, consider the following example:

Imagine you have just hired an expert in supply chain. Many of the stuff in the process of this new employee joining your company can be considered a commodity. Example can be: getting an id badge, a place for her to sit, acquiring the access rights for her to your numerous systems. Typically her line manager needs to individually ask specific departments to accomplish a variety of simple tasks to properly integrate her to the organization. In an optimized process, the line manager requests a new employee setup, which would automatically initiate a basic series of 15–20 tasks by sending appropriate requests to the relevant departments. Many of these tasks should be automated, so that no human intervention is needed.

Now take the same expert during her first month. If she needs to spend all her time in discussing day to day operational stuff with your ERP teams, then she can never spend time on disruptions and experimentations. This means that there needs to be a continuous focus on optimizing your vital systems (ERP in these case) both from cost perspective as well as from the perspective of freeing up people’s time. It is only then can she really contribute her expertise towards real disruptions in the digital world

In summary, when running your business in a dual state, the most important thing is strive for balance. Instead of permitting your digital and traditional business to compete with each other, you should balance the needs of your digital and traditional business.

Let’s return to the image of the modern cityscape that was described in the previous post. A day in this cityscape can represent the orchestration of the future. Imagine the sun rising from behind the smart city side and setting on the traditional city side. Let the morning sun represent the future—where your digital and disruptive innovations happen. The midday sun represents the traditional business that is optimized by digital innovations. The sun sets behind those parts of the city that contain commodities, elements that should be dealt with in a cost efficient manner and should not be your focus.

When all three of these aspects are considered and in balance, disruptive innovations are fostered and your business can continue to be optimized into the future. When you successfully balance these parts, you can orchestrate the future. 

Read more about digitalizing your business here!

Stay up-to-date

Get all the latest blogs sent you now!